Broader Labor Market Concerns Weigh on Consumers

The Conference Board’s Consumer Confidence Index®, which had declined in June, improved slightly in July. The index now stands at 59.5 (1985=100), up from 57.6 in June.

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The Present Situation Index decreased to 35.7 from 36.6. The Expectations Index rose to 75.4 from 71.6 last month. The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by The Nielsen Co., a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for July’s preliminary results was July 14.

“Consumer confidence posted a modest gain in July, the result of an improvement in consumers’ short-term outlook,” said Lynn Franco, director of The Conference Board Consumer Research Center. “Consumers’ appraisal of current business and employment conditions, however, was less favorable as concerns about the labor market continue to weigh on consumers’ attitudes. Overall, consumers remain apprehensive about the future, but some of the concern expressed last month has abated.”

Consumers’ assessment of current day conditions weakened further in July. Those stating business conditions are “good” decreased to 13.4% from 13.7%, while those claiming business conditions are “bad” increased to 39.0% from 38.4%. Consumers’ appraisal of the job market was also less favorable. Those claiming jobs are “hard to get” increased to 44.1% from 43.2%, while those stating jobs are “plentiful” remained unchanged at 5.1%.

Consumers’ short-term outlook improved moderately in July. The proportion of consumers expecting business conditions to improve over the next six months increased to 17.7% from 16.5%. However, those anticipating business conditions will worsen also increased, to 15.2% from 14.9%.

Consumers were also mixed about the outlook for the labor market over the next six months. Those anticipating more jobs in the months ahead increased to 16.7% from 13.8%. However, those expecting fewer jobs also increased to 21.8% from 20.7%. The proportion of consumers anticipating an increase in their incomes rose to 15.7% from 14.1%.

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